Friday, October 14, 2016

8 tax things to think about as you rush to meet the extended Oct. 17 return filing deadline

It’s almost here, the Oct. 17 tax extension filing deadline. Since the regular 15th due date is Saturday, procrastinating filers get a couple of extra days to do their tax jobs. Don’t waste them. But also don’t be in such a last-minute panic that you waste some valuable tax opportunities or mess up your return. Here are 8 things to think about as your finally fill out your 1040. 1. Claim every tax break you can: No one should pay any more tax than they absolutely have to, according to a current presidential candidate and even the Internal Revenue Service. Trimming your tax bill can be accomplished by claiming every tax break for which you’re eligible. This includes a variety of credits, such as the many child-related ones, some educational tax-saving options, the Earned Income Tax Credit for single as well as family filers and he Saver’s Credit if you put money into a retirement account. And don’t overlook deductions, including those above-the-line ones available to any qualifying taxpayer regardless of whether they take the standard deduction or itemize. You can find more about these and other overlooked tax benefits in my previous post on 18 often overlooked tax deductions and tax credits, as well as in my item on 10 costly tax sins of omission. 2. Don’t make common filing mistakes: You could say that missing tax breaks is a mistake, but there are plenty of other errors lots of folks make, especially if they’re in a hurry to file. Among the errors to avoid are: Math miscalculations Computation errors Overlooked additional income Filing status confusion Forgotten charitable contributions You can find details on these and others in my earlier post on 10 last-minute tax-filing mistakes to avoid and also in the item about the potential high cost of 10 tax sins of commission. 3 File for free: If you’re using tax software, you likely will be able to file your federal return for free. But you might not even have to shell out for software. If your adjusted gross income last year was $62,000 or less, check out Free File. This partnership between the Internal Revenue Service and tax software manufacturers is still available through the Oct. 17 deadline. If, however, you insist on filing the old-fashioned paper way, be sure to check out these tips for sending your 1040 via snail mail. 4. File your state return: If you put off your federal filing, you probably delayed your state tax task, too, since in most cases they are interconnected. So don’t dally with your IRS forms. You’ll need time to finish your state extended filing by the 17th, in most cases, too. 5. Direct deposit your refund: Yes, even some procrastinators are due refunds. To get it as soon as you can now that you’ve finally filed, the IRS recommends using direct deposit, especially if you’re e-filing. Using both electronic options means, according to Uncle Sam’s tax collector, that you’ll get your refund much more quickly. 6. Pay what you owe: When you filed for an extension, you paid any due tax that you estimated you’d owe, right? Well, sometimes that amount changes when you finally fill out the forms for real. If that’s the case and you now find that you owe more, pay it with your extended filing. An easy way to do this is electronically via IRS’ Direct Pay option. The good thing here is that it gets your money to the U.S. Treasury ASAP, which will stop the penalties and interest that will be figured based on the April 18 original due date. 7. Set up a payment plan: If you can’t pay your newly discovered tax bill in full, set up a payment plan with the IRS. The agency offers a variety of options, with details at its payment plan page. 8. Double check your deadline: While Monday, Oct. 17, is the drop-dead due date for 1040s from most of the estimated 9 million folks who have yet to file, some folks get extra time. Unfortunately, the situations that allow added filing days aren’t exactly ideal. Military personnel and others serving in a combat zone generally get more time to file. If this applies to you, you typically have until at least 180 days after you leave the combat zone to both file returns and pay any taxes due. So do folks in major natural disaster areas. That’s the case for taxpayers in parts of Florida, Louisiana, North Carolina or West Virginia that were hard hit by Mother Nature this year. The IRS is expected to add more areas to the list as soon as it gets reports from Federal Emergency Management Agency folks following up on the damages from Hurricane Matthew. You can check back here at the ol’ blog for updates, as well as visit the IRS’ disaster relief page. Now get to work on that 1040. The sooner you get it done, the more time you’ll have to enjoy your weekend!